Divest CMU Demands Severance from Fossil Fuel Industry
Divest CMU, a student-led environmental group, wants the university to cut ties with the fossil fuel industry. In its petition statement, the group wrote: “From 2011 to 2019, the percentage of the endowment invested sustainably declined from 3.6% to 1.9%, despite the endowment doubling in size.”
Between 2020 and 2021, the endowment grew by more than one billion dollars, a 43 percent return rate. Of the university’s $3.1 billion endowment, only 1.9 percent is invested in “sustainable industries," according to university data self-reported to the Association for the Advancement of Sustainability in Higher Education (AASHE). Carnegie Mellon’s annual report does not disclose the amount it invests in the fossil fuel industry.
“The university does not have a blanket fossil fuels divestment policy, nor does it have plans to pursue one,” Chief Investment Officer Charles Kennedy wrote in a statement to The Tartan. Instead, he said, the university invests in “managers that are addressing issues such as sustainability and energy transition to persistently create value in their companies.” Carnegie Mellon does not have a sustainable investment policy.
Since its launch on March 1, the Divest CMU petition has received 115 signatures; approximately 50 percent are Carnegie Mellon students, 25 percent are alumni, and five percent are faculty, according sophomore Charlotte Ng, who is leading the movement. “To us,” she said in an interview with The Tartan, “it seems hypocritical to invest in fossil fuels when CMU likes to boast about its commitment to the environment.”
When asked if Carnegie Mellon employs a written standard of ethics when making investment decisions, Kennedy referred to the university’s Code of Business Ethics and Conduct. The Code’s section on financial assets does not discuss ethics. Aside from emphasizing “the highest standards of ethical and professional conduct” and that business be conducted “in good faith and with fairness, accuracy, integrity and respect for others,” the only other relevant Code section addresses conflicts of interest of investment advisors.
“CMU considers environmental, social, and governance [ESG] issues both because it impacts performance, but also because it encourages accountability and transparency,” Kennedy explained to The Tartan, “which may lead to reduced exposure to various risks and improved long-term value creation.”
Kennedy views revenue generation as a mechanism for sustainable decisions, both ethically and financially. “By following strong ethical business practices, [Carnegie Mellon’s] investment managers can demand higher market valuations for their companies because of their standing as reputable leaders.”
Sustainable Earth co-presidents Eden Harel and Jenna Stanislaw told The Tartan that the university is responsible for its environmental impact on the local community. Harel, a graduate student studying civil engineering, referenced the influence of “Andrew Carnegie, the steel industry, and the gentrification that CMU has contributed to.”
Carnegie made his fortune from industrialization. By the time he was 30, the Carnegie Steel Corporation was underway, which would become “the largest steel manufacturing company in the world,” according to The Carnegie Corporation of New York. Pittsburgh was the global capital of steel production in the 20th century. The environmental repercussions of this legacy continue today; of U.S. cities, Pittsburgh has the fourth highest pollution-related mortality rate.
Harel and Stanislaw led Sustainable Earth’s advocacy for an Office of Sustainability. “Lots of students have ideas about how to promote sustainability on campus,” Sanislaw explained, but the “distinct lack of centralized authority makes it challenging for students to share them.” After proposing an Office of Sustainability to the university, Stanislaw “felt like they were meeting with us to check the box to say they were receiving student input rather than actually listening to us.”
Numerous peer institutions have an Office of Sustainability. Yet Carnegie Mellon administration, according to Stanislaw, continuously told her “research needs to be done.” That line of reasoning fell short for Stanislaw: “We’ve done the research.”
Carnegie Mellon’s Sustainability Initiative outlines education, research, and practice goals for the university and began publishing annual reports in 2020. The document identifies ways that Carnegie Mellon is promoting environmentally-conscious programs and gaps it needs to fill.
After circular conversations with administration, Sustainable Earth doubts Carnegie Mellon will pool the resources for an Office of Sustainability. “Pushing for an Office of Sustainability took up a lot of our combined efforts and that was met with a lot of force back from the college,” said Harel.
Stanislaw, a senior in biological sciences, expressed frustration towards the exhaustive efforts it takes to get the university’s attention. She feels Carnegie Mellon should “take responsibility without students having to demand it. Instead, they are doing things in a very particular way to appease stakeholders.” Stanislaw wants to see the university “giving more power to students in a way that’s more than just performative.”
Around the world, 176 universities are divesting from the fossil fuel industry, according to the Global Divestment Commitments Database. In 2020, the University of California (UC) system severed financial ties with fossil fuels. The UC system maintains the 12th largest university endowment in the country, according to the National Center for Education Statistics. Among the 13 universities that Carnegie Mellon self-describes as peer institutions, nine have no divestment plans. In 2020, Georgetown and Cornell promised to fully divest within the decade; Princeton and Stanford have committed to partial divestment.
At the University of Pittsburgh, 91 percent of students who voted on a 2019 ballot initiative supported fossil fuel divestment. When the university announced plans to phase out fossil fuel investments by 2035, their Student Government Board (SGB) demanded greater urgency. However, the university made no changes to the 2021 plan for gradual divestment. At $5.7 billion, the University of Pittsburgh ranks 24th in U.S. education endowment size.
In June 2021, recent Carnegie Mellon alumni Sean Donnelly, Katie Hart, and Jacob Feldgoise completed a report they had worked on through Roosevelt at CMU, a student-led policy-based think tank. “We recommend that CMU’s Investment Office implement an empirical metric,” they wrote, to quantify the environmental impact of “each company and private equity fund that is currently held by the university.” This would create a comprehensive tracking system to hold Carnegie Mellon accountable to its valued ESG factors. The team advocated for the university to publish this information, in the spirit of sustainability leadership.
Divest CMU has spoken with Director of Sustainability Alexandra Hinniker, Vice Provost for Diversity, Equity and Inclusion Wanda Heading-Grant, and leaders at the Center for Shared Prosperity. The Center, which funds projects to promote equity in Pittsburgh, was introduced in April 2021.
Ng was encouraged by the Center’s receptiveness and support of the divestment campaign. “Their mission really aligns with ours,” she explained, citing the Center’s “work with local organizations involved in environmental justice,” which grounds equity work in representative inclusion.
The Center for Shared Prosperity could not immediately respond after a request for comment by The Tartan.
Fossil fuel divestment campaigns first appeared on campus in 2014, and have since slipped in and out of action. Newer initiatives include the Environmental Justice Speaker Series, which Sustainable Earth hosted last year, and Chartwells’ recommitment to composting.
In November, Students from Carnegie Mellon, Chatham, and Pitt rallied together during a climate march. They called for university fossil fuel divestment, carrying signs that read “People over profit,” “Pitt invests in the end of the world,” and “Why invest in education if we have no future.”
Divest CMU is planning a rally for Saturday, April 9, at 1:30 p.m. Ng sees Carnival weekend as an opportune time to raise awareness about the urgency for divestment.
“CMU as an institution is dedicated to fighting climate change and creating a more sustainable world,” the authors of the 2021 Roosevelt at CMU report emphasized. “However, the university’s financial investments do not currently reflect this commitment.”